The simple answer to the question? Too much.
From the perspective of doctors, patients, and insurance companies, the cost of receiving care in the United States is far too high. Factors from all sides feed the problem and build on one another. Most of us only see one or two pieces of the puzzle at any given time, and that makes it incredibly challenging to interrupt the feedback loop in a meaningful way. Without a complete picture, we can’t fully understand what the true cost of American healthcare is.
Doctors face an uphill financial battle to even break into the field, and once they’re in, they face a for-profit health system that values financials over patient care. Individuals are unable to receive care because health insurance is too expensive, but so are the medical fees when you’re uninsured. Insurance companies regularly raise premiums or deny claims in order to keep their business models afloat. Something needs to change, but figuring out where to start is the million-dollar question.
The Burden for Doctors
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In order to become a medical professional, the United States requires years of costly school and extensive training. And rightly so, of course; badges of medical expertise should not be handed out lightly. However, after leaving school, the average doctor who has earned an MD has also earned $190,000 in educational debt. For more complex certifications, such as orthopedic medicine or surgical licenses, they walk away with an even greater burden.
Luckily, in most instances, the salary is proportionate to the debt, and the former medical students turn their financial well-being around within a matter of years, provided there are good job prospects. The cost doesn’t end there, though. The personal monetary burden may be over, but doctors enter into a system that is driven by profit over the patient. Those who entered the medical field with a desire to help people, give care, or further science find themselves in the middle of a bureaucratic system that creates processes more concerned with the bottom line than with a person’s access to health.
This drive for profit manifests in a number of ways. Doctors are pushed to see as many patients as possible during an hour, with clinics or institutes often insisting that they visit as many as six patients in a single hour. Vitals, family history, and other “routine” parts of care are performed by a nurse or physician’s assistant, allowing the doctors to zip in and out of rooms to diagnose and prescribe, frequently leaving follow up to other medical staff as well.
Treatment that values efficiency above all else misses on the opportunity for patients to form bonds with their doctors or to feel comfortable divulging more personal or sensitive information that may be pertinent to care.
Testing to Much?
Doctors are also encouraged to perform more lab tests. While the increased efficacy of medical testing — especially rapid tests for common ailments — can speed up the diagnosis process and minimize the error margin, tests are often performed when there may be little to no medical need for them. In part, patients who research their symptoms online and come in to specifically request a course of action are to blame for “the customer is always right” medical service. It can be hard for doctors to maintain their authority and expertise when the internet makes it incredibly easy to become an armchair expert on just about anything.
However, beyond patient request or demand, excessive testing can lead to inflated bills. On the one hand, the facility experiences an increased cost due to running the lab work and processing specimens. They, of course, deserve compensation for their labor, and equipment costs money to run and maintain. Patients often foot the bill for such testing, though, especially if an insurance company deems the charge unrelated or medically unnecessary.
Insurance denials also play a role in the type of care doctors are able to provide. If visits aren’t coded correctly, authorizations aren’t obtained, or services are performed out of order, the healthcare facility or patient will end up with the bill. Even more commonly, insurance companies are creating wellness questionnaires designed to measure a patient’s progress, and these metrics are used to determine how many times or how often a doctor can see a given patient. The pressure to provide consistent forward progress in a way that can be quantified demands more testing be done, and risks eliminating treatment options that may benefit a patient.
On the flip side, because care is doled out in a fee-for-service system, clinics and facilities stand to make more money by performing more services (or coding services differently). Facilities may also have contracts with various pharmaceutical companies that act as an incentive to prescribe medications, even though up to $5.4 million of prescriptions are thrown away every year due to treatment non-compliance.
While it may be a stretch to say that healthcare facilities overbill to line their pockets, there are certainly a few bad apples that ruin it for everyone else. Even if care performed is within normal expectations, bills can be surprising, as it’s not always clear to the patient how costs will be broken down or how much individual services cost.
Bills From a Patient Perspective
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Understanding the cost of healthcare as a patient is a massive, overwhelming, and frustrating undertaking. The intricacies of the billing and insurance world are occasionally confusing even to those who work in the sector, but as a patient, so many variables are obscured that it’s nearly impossible to see the big picture.
Without an understanding of medical bills, it makes patients much more likely to overpay for care that may not be their financial responsibility. Neither medical offices nor insurance companies are infallible, and that leaves some billing mistakes to be caught by patients. An insurance company may incorrectly deny a claim or a facility may balance bill what should be a write-off. Without carefully cross-checking the insurance provided explanation of benefits with the medical center’s billing statement, it can be difficult to catch those mistakes.
When patients are overcharged, the miscalculation often isn’t caught unless the facility is alerted. However, even if a patient feels a bill is too high, they might not report it. Either the patient assumes that he bill is high because medical care in the United States is expensive, insurance is too difficult to understand or deal with, or they’re not sure how to appeal the medical bill. It’s often a long and complicated process that involves interfacing with both the insurance company and the care facility, and there’s always a chance that the claim will still be denied, even if the ruling doesn’t seem to make sense.
Other times, high medical bills aren’t due to a mistake. The simple truth is that medical care in the United States is insanely expensive, and it’s difficult to find out how much a procedure will cost before agreeing to it. Medical facilities have to charge enough money to cover operational expenses and still potentially turn a profit. While individuals with insurance receive a discount for contracted care or in-network services, those without end up with unadulterated fees that were never meant to be charged to a patient.
Even if a patient does have insurance, high deductible plans have become the norm in society. Though these plans were originally meant for young, healthy individuals who wouldn’t need much care, they’ve become the standard across the insurance system. It’s rare to see a deductible under $1000, and if you do, it’s probably that the subsequent coverage is mediocre at best. Being involved in a medical emergency can bankrupt a family, or put an individual in medical debt that can damage their future financial opportunities.
With high deductible plans becoming more and more prolific, the cost of anything other than an annual wellness visit can be shocking. Copays may cover primary care visits, but the patient is stuck with any necessary labs or imaging services that may accompany the diagnosis. For generally healthy individuals, it’s often more financially sound to pay out of pocket for wellness care once or twice a year than to commit to an insurance premium each month (for coverage they may or may not need). Young individuals who want to start a family have to contend with the financial burden of a pregnancy on top of all the other life changes — even an uncomplicated labor and delivery can cost upwards of $10,000.
When a several hundred dollar bill is only a fraction of a plan’s deductible, it’s unlikely that plan holders will make it through their deductible within a year. When expensive medical procedures like having a child or dealing with an unexpected acute injury arise, it forces patients to meet their deductibles. It’s not uncommon to hear people in this position planning other expensive procedures or elective procedures on a flexible timeline to happen within the same year, thus avoiding having to meet their deductible more than once.
For those experiencing the inevitability of aging or dealing with a chronic illness, the coverage game gets a lot more complicated. Even with “good” insurance, patients still need to meet their deductible each year and hope that the rest of their care is adequately covered, and that doesn’t even take into account safely accessing much-needed medical care. With increasing uncertainty around what insurance companies are required to cover and how pre-existing conditions affect premiums, supplementing the cost of specialty medical care is getting harder to do effectively.
For-Profit Insurance Companies
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Insurance companies are the easy villain in the story of American healthcare, though as you’ve seen above, it’s not quite that simple. Despite the cost of education, medical supplies, care itself, as well as the role of patient literacy, insurance companies play an undeniable part in the absurd price of healthcare.
Most insurance companies in the United States operate on a for-profit model. At first glance, this seems normal for a business in a capitalistic society. However, when you put a for-profit business plan up against a value system that claims to protect access to affordable healthcare, something doesn’t quite add up.
The mission of an insurance company may be to protect their clients and mitigate the cost of healthcare, but when a company is driven by profits, the bottom line will always be more important. Some companies choose to raise their bottom line by truly taking care of their customers, but in the health insurance industry, taking care of your customers usually involves spending money — and a lot of it.
Premiums and deductibles help to offset the cost to insurers, but once the deductible is met, the insurer’s portion of the bill is generally higher than the insured’s portion. To help avoid high costs, insurers place tight restrictions on health plans. These can vary from the type of specialist a patient can see how much care is paid for without a referral or what offices a patient can go to.
Approved offices often have a contract with the insurance company to lower rates, though not all doctors in an office are required to be on the contract — it depends on who’s enrolled. Patients may think they’re going to an in-network facility only to receive a higher bill because the doctor who treats them is out-of-network. Similarly, a patient may see an in-network provider, but if the proper referral or authorization paperwork isn’t filled out, the claim can be denied with no opportunity for appeal.
Beyond networks and authorization based denials, insurance companies may also deny claims for billing and coding errors. Minute details in a diagnosis code or the wording of a doctor’s appointment note can result in a denied claim with strict appeal rules or impossible time frames. In extreme cases, a misspelled name or transposed birth date will trigger a denial and requires patient verification to amend.
The current insurance system is too bureaucratic to functionally serve patients. Companies motivated by profits and mired in hyper-specific processes do not prioritize care and wellness. While the original model may have made sense, modern insurance does not fit the healthcare bill — literally.
Addressing the Insurance Issue
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There’s no easy answer to this one. If there were, it wouldn’t be at the forefront of the nation’s politics, and it would have been taken care of long ago. Primarily, costs need to be lowered, and that can happen in a handful of ways.
Least likely, but still possible, is that all the players agree to lower costs. Across the board, expectations of compensation would need to be lowered. Insurers would need to stop negotiating fee schedules below the “going rate” and commit to paying what their plans cover. The plans themselves would need to cost less and cover more. Healthcare facilities need to lower rates, but in order for that to happen, supplies, malpractice insurance, and salaries would take a hit. It’s possible to utilize new technologies to mitigate costs; a medical grade 3D printer can produce the same equipment that would normally be ordered from a catalog, only without the processing, shipping, and company mark up costs associated.
Practitioners would see lower compensation rates, though if insurance were paying more claims in full, some of that could be retained. Even still, student loan forgiveness for public health work should be reinforced, and educational institutes on the whole should reexamine their tuition structure.
Patients, for their part, would be expected to better understand their coverage and their health. Reactionary health creates patients that don’t take an active role in their health until they’re sick — to keep costs down, patients need to be proactive about wellness and preventative care.
That mindset shift grants another possibility: embracing community health and a patient-centric model of care. Insurance models for community health are incredibly different from the current fee-for-service model. For each patient that’s covered, the insurance company would pay a set amount to a healthcare team for a period of time, be that yearly, quarterly, or monthly. If the healthcare team goes over their “per capita” amount, they have to eat the extra cost. If their patients are healthy and require less care, then they have more money leftover to treat others with. That’s an oversimplification, but the general idea is to incentivize interdisciplinary teams of practitioners to prioritize results and preventative care over making money.
No matter what direction America chooses to move in, it will be painful. Changes this large won’t happen overnight, and they certainly won’t occur without growing pains. However, the current status quo is unacceptable and unsustainable; something’s got to give, and it shouldn’t be patient health.